tax changes 2015

Tax Changes for Small Business

The Australian government announced some major changes as part of 2015’s federal budget. These changes, presented in May 2015, indicate huge benefits and incentives for small businesses.

Here are some notable changes in small business tax:

An immediate write-off of $20,000

  • Up to $20,000 for asset purchased can be claimed by small businesses. Though the number of assets that can be claimed is unlimited, the value of every asset purchase should not be more than $20,000, including installation costs or related items.
  • Eligible businesses are those with a yearly turnover of $2 million or less.
  • This new rule only applies to small businesses that are considering replacing or buying assets for business use.

Cut in tax rate

  • The present tax rate for unincorporated enterprises – single traders, partnerships and trusts – with a turnover below $2 million will be reduced by 5% to up to $1000, granted as a tax credit when employers submit their tax return.
  • The tax rate for incorporated small enterprises with turnover of less than $2 million will be cut from 30% to 28.5%.
  • Eligible small businesses will see the amount of tax they pay at the end of the financial year reduced because of this tax rate cut.

Start-up costs, capital gains and fringe benefit taxes

  • Capital gains tax will no longer be paid by small business that modify their legal structure (for instance, to an incorporation) beginning the July 2015 to Jun 2016 year. In addition, start-up costs incurred by a small business, specifically professional fees for accounting, advice and other professional services, can be claimed in its entirety as a tax write off.
  • Starting April 2016, fringe benefit tax exemption can be claimed by small businesses for one or more qualifying work-related portable electronic devices they provide to employees.

See a qualified tax advisor, accountant or bookkeeper for tax enquiries, including capital tax gains, fringe benefits, and more. PJS Accountants can help you organise your tax affairs. We work with large companies, SMEs, family businesses and individuals. For enquiries, contact PJS Accountants.